Chronicle EditorNew York — The dollar rallied with US stocks and Treasuries extended their losses after US retail sales exceeded forecasts last month, boosting speculation the Federal Reserve might lift interest rates again this year. Oil fell for a second day.
Most major US equities indices opened higher, while traditional havens including gold and the yen slumped as the threat of war over North Korea receded.
The Stoxx Europe 600 Index edged up after the German economy extended its growth spurt in the second quarter, albeit at a slower pace than expected.
The British pound tumbled to a five-week low after UK inflation unexpectedly held steady in July, clouding the outlook for rate increases, while oil extended a slide to below $48 a barrel.
Monthly retail sales in the world’s biggest economy advanced by the most this year in July, bolstering the case for more policy tightening. Federal Reserve Bank of New York President William Dudley earlier said he favoured another rate hike in 2017.
Meanwhile, Japan’s currency — a haven in times of global tension — slumped after the Wall Street Journal characterised a North Korean media report as indicating that president Kim Jong Un had decided not to launch a threatened missile attack on Guam.
The report, from KCNA yesterday, said Kim praised the military for drawing up a “careful plan” to fire missiles toward Guam. Kim was cited by KCNA saying he would watch the US’s conduct “a little more.”
And in Germany, data showed the economy expanded 0.6% in the second quarter, driven by domestic demand. That missed estimates slightly, but was accompanied by a revision in the first-quarter number. The euro retreated. — Fin24.
Online Reporter